EVIO Inc (EVIO)

[fiveteenthirty]

American Bar Association: A CEO's relationship with their shareholders carries more legal responsibility than his relationship with his company's creditors.This is because the creditors' relationship with the company exists purely as a result of a legal contract.

The shareholders' relationship with the CEO, by contrast, entails both a binding contract and the trust of that CEO in controlling the shareholders' property.

Fiduciary Duty of Good Faith and Fair Dealing
This fiduciary duty is closely aligned with the duties of care, loyalty, and obedience. Under this duty, officers and directors must act with honesty, good faith, and fairness when handling corporate obligations. This continuing duty runs through their daily tasks and operation of the corporation.

Fiduciary Duty of Disclosure
Candor in business discussion is important between officers, directors, and shareholders so that they may assess material risks and make informed decisions. Full and fair disclosure of material facts is essential before seeking board or stockholder approval of major corporate business transactions, such as a mergers with or acquisitions of other companies. As part of their duties of loyalty and care, officers and directors should also disclose any potential conflict of interest that may arise between their individual interests and those of the corporation.

Fiduciary Duty of Care
In a corporate environment, both officers and directors are expected to use appropriate care and diligence when acting on behalf of their corporation. They should exercise reasonable prudence in carrying out their duties to achieve the best interests of the corporation. An officer or director may be held personally liable for failing to exercise reasonable or ordinary care under the circumstances. For example, a lack of due care may be shown when an officer or director fails to undertake a reasonable review of a corporate matter, to regularly attend board meetings, or to adequately supervise staff which ends up damaging the corporation.

https://www.nolo.com/legal-encyclopedia/fiduciary-responsibility-corporations.html